Practices of women’s saving and lending groups: Bath University students exchange to Cape Town, South Africa

Nabaa Zaynah, Sophie Moody, Kate Hunt, Hien Le (Bath University Students)

On the 5th of September, SA SDI Alliance facilitated an exchange between International Development with Economics students from the University of Bath and three Federation of the Urban Poor (FEDUP) savings groups. The exchange took place with three different Federation savings groups based in Philippi and Samora Townships – Cape Town – Siyazakha savings group, Hlala uphila, and Thubalethu loan group. The focus of the day was to learn about the micro financing schemes of the Federation of the Urban Poor and understand how the women of Philippi and Samora township are working in small groups to encourage saving and provide access to credit.

Bath University students with Federation of the Urban Poor savers in Phillipi, Cape Town.

Savings groups in Cape Town

The first group visited was Siyazakha savings group based in Siyahlala, Philippi. The second savings group was Hlala uphila based in Philippi a few streets away from Siyazakha savings group. The third and final group visited is Thubalethu loan group in Samora. The former saving group is part of the Federation Income Generation Programme, which assist members to start small businesses, and enabling the movement to generate its own income through landing small amounts of money to FEDUP members to start businesses. 

Siyazakha savings group and Hlala uphila saving group have been around since 2007 and 2009 respectively, and Thubalethu loan group was established in 2014. On average, each of the group’s members ranged between 30 to 40 people, largely all women, ranging in age, both young and old, and included housewives as well as working women who had their own small businesses. Some of the more experienced members of the group take positions of chairpersons or collectors, conducting the group meetings, assisting others and facilitating intake into the groups, as well as liaising with official bodies such as the municipality. 

Federation leaders explaining the origin of their saving scheme and early challenges.

The practices of the Cape Town women’s saving group

The support from FEDUP provides urban and rural poor women with an effective way to keep track of money in terms of both saving and lending. The roles of the different members of the group are also crucial in ensuring the smooth transition process of money, for example the collectors in the group gather the monies due each meeting and ensure its safe arrival in a bank deposit fund.

The savings group began with the organisation teaching one member the numeric skills needed to fill out a saving record book, which lead to that individual teaching others and so on. This depicts the snowball effect FEDUP triggers as its practice result into the doubling and tripling of members in the saving groups, without the need of many resources or support. It shows how if given the chance people can take control and empower themselves.

The FEDUP saving programme demonstrates that it is possible for people to take control in changing their lives. Control, which is difficult to find in a context where one can quickly become unhopeful due to a unresponsive government that has given such women empty promises and little support in these times of hardship. The savings group are built on community trust and unity; also used as a tool by the community to mobilise around the issues affecting the community. One of the savings group, Siyazakha mobilised around formal toilets in Siyahlala informal settlement and electricity. Through engagement and planning the community received formal toilets and electricity. 

Thubalethu savings group members collecting their monthly savings.

Saving groups as a tool for women empowerment

Savings group financially empower women since most households rely on limited income. In most times this income does not cover all house expenses. The formation of savings group has given the women some financial freedom, they are able to contribute to the income of their household and that has balanced out the dynamics at home. The savings gave the women a sense of hope, and encouragement to continue saving as they could see the impact the saving made in their lives.  

Savers of Phillipi emphasis the social benefits or the able to build social capital through saving groups. Since groups meet weekly this gives them an opportunity to be open and honest to each other in discussing issues. Some of the shared information revolved around personal matters such as domestic violence, mental health and other daily concerns, however the women also described how discussing larger matters such as an unreliable electricity supply could drive improvements.

As a group they felt more empowered to make a stand and take action collectively against problems, whereas for an individual it is easy to feel that your problems are only relevant to you and no-one else and therefore the progress of change is likely to be slower without these kind of interactions. Moreover, the opportunity to meet up with other women who are likely to be facing similar challenges is within itself an empowering concept, and generates a space for open discussions which in a busy restrictive society can be difficult to create.

The relationships between members are consequently genuine as a result of the discussions which take place at the weekly meetings. This helps create the trusting relationships between the women of the group which is vital in scenarios like this one which involve peer to peer financial matters such as lending. Interactions between group members help them gain trust among each other which allows them to become more understanding in the way the group lends money.

The “gooi gooi” system, for example is used to support those in the group who need immediate financial assistance. This system describes the way in which each month all group members will pay into a communal pot that is then distributed in full to one member, with each person taking turns in receiving this lump sum. If  one member is in difficulty and struggling to pay back a loan they would dedicate the next month’s “gooi gooi” money to that member. This demonstrates the sense of community and humanity that is evident across the scheme.

Through saving Nontombi (depicted in the picture) has managed to grow her clothes selling business.

Conclusion 

What struck us across all the groups we met with was how passionate and resourceful these women were and we found their stories truly inspiring. We have gained so much admiration for these women who have achieved incredible things despite facing the harsh reality of post-apartheid South Africa. The day forced us to reflect on our personal goals and aspirations in life, to focus on what truly matters. It doesn’t quite feel right simply buying a tea towel sold by these women and saying goodbye as I feel so strongly now that I want to help more. We really hope that one day we will be in a better position to do this not just for the women we met, but for all those in similar positions across Cape Town, South Africa, Africa and the world.

We walked away from three homes feeling inspired, fulfilled, enriched, and hopeful. We learnt so much about how human values can make a major difference in someone’s life. These women have definitely improved their life, not through monetary value, but through a system of love, humanity and compassion. We also found their system of saving scheme interesting to contrast with the United Kingdom’s banking system as overall the understandings of financial services on an individual’s family and private matters is overlooked dramatically unless you are wealthy enough to have a private banking account.

Therefore, we think the United Kingdom and other developed countries could learn a great deal from these schemes in order to deliver a more understanding financial system which takes into account personal circumstances and utilises the community’s knowledge of one another.

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